For example, adjacent Trusts might decide to collaborate by merging their HR or IT functions.
The former is ‘obvious': if you have fewer managers, IT systems, buildings etc; if you use less of some resource, it will reduce costs.
The second argument is ‘efficiency through industrialization’.
It is sometimes assumed that a joint venture between a government department and a commercial organization is an example of shared services.
The joint venture involves the creation of a separate legal commercial entity (jointly owned), which provides profit to its shareholders.
Shared services is the provision of a service by one part of an organization or group, where that service had previously been found, in more than one part of the organization or group.
Thus the funding and resourcing of the service is shared and the providing department effectively becomes an internal service provider.
A large-scale cultural and process transformation can be a key component of a move to shared services and may include redundancies and changes of work practices.
It is claimed that transformation often results in a better quality of work life for employees although there are few case studies to back this up.
Although the amount of KPIs chosen differs greatly it is generally accepted that fewer than 10 carefully chosen KPIs will deliver the best results.
Organizations do attempt to define benchmarks for processes and business operations.
Clearly, the use of off-shore facilities by a government department is not an example of shared services.